Usd/Jpy
Weekly Trend: Short. Main price points: 87.10, and 101.44. Looking for: Wave 5
Usd/Jpy weekly chart is showing a bearish structure with an ending diagonal pattern in the red wave 5 position. The market came down from the wave 4 top to the current lows with a decline of a three wave structure in each leg overlapping waves 1 and 4. This is a typical structure of an ending diagonal pattern, shown on the chart below that can only occur in wave C, or wave 5, positions, and indicates a turning point.
This turning point should follow as soon as wave 5, of the red wave 5 shown, is completed with a three wave pattern from the 101.44 area. The black wave 4 highs must hold. These lows may be found somewhere around the 161.8% extension of a black wave 4. The wave count will be invalidated if the 101.44 resistance area fails.
Daily chart trend: Short. Main price points: 91.74, 98.88, and 101.44 Looking for: Wave (X)
On the daily yen chart, prices fell down to the 91.74 support area with a three wave leg. For now it is labeled as blue waves A), B) and wave C). The current price action from the 101.44 area, the black wave 4 top is very tricky, as the market may be trading in a pull-back from the down-trend (blue wave (X)), or it may be the start of a new up-trend if the 91.74 support area holds. However, traders must be very patient, and wait on some important price points to be taken out. A break of 98.88 will lead us above 101.44, while the break of 91.74 will confirm a complex bearish trend in a black wave 5 position.
4 Hour chart trend: Short. Main price points: 92.50, and 94.05. Looking for: Wave III)
Usd/Jpy is still trading in a powerful down-trend channel, with a current low just a few pips above the 91.74 support area. If the 91.74 support area gets broken in the near-term, while the 93.42 holds as resistance, then we believe that a powerful move of a black wave III) will be in play. In this case, we will be looking for a move down approaching the first target at 161.8% extension, followed by a second target at 200% extension of a black wave I) distance, if equities get sold at that time.
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